Compiled reasons for CoH Shut-down

What follows is a compilation (from CoH forums and several other sources) of some of the theories and supposed/alleged reasons for NCSoft shutting down City of Heroes:

Stable profits From City of Heroes, but far from projected expectations:
* While not as large as other games, CoH retained a strong and very loyal fan base, having 120,000 subscribers in the US and Europe and a hybrid cash shop. Despite its age, the game still was winning awards.
* While City of Heroes was not the largest of NC Soft’s assets, it was a cash cow bringing in what has been $10-13 million net profits per.
* An examination of NCsoft's IR (Investor Relations) report for August 2012, visible on the thirteenth page of the report, sales related to City of Heroes have remained fairly constant, slightly increasing per quarter.
* Presumably, CoH profits were not upto projected expectations, and therefore, was not aligned with the profit goals of the mother company (NCSoft) for the year.
Translation: CoH is profitable, but it was still tying up a fair amount of resources, and it wasn't a huge return of investment as expected.

Asian business strategy culture: successfully saving face while building-up investor confidence
(by ensuring hype Guild Wars 2 is an overwhelming success during launch weekend).
* Investors are leery of mmos after SWTOR took a nose dive.
* Funcom’s latest MMO, the Secret World, hasn’t performed as well as the company had hoped, with the latest sales figures looking very bleak. Despite the The Secret World having over half a million beta players, the game itself has only sold around 200,000 copies since it’s launch on June 29.
* If GuildWars 2 was the title that failed them, GW2 is still their baby, and CoH is an old, acquired title. They’re going to cut ties with the game they didn’t create, not something they built from the ground up; realocating resources from old franchise for the new one was a solution.
* NC Soft’s new major stockholder, Nexon, is putting pressure on them as a result of (development) cost overruns on the new games, Guild Wars 2 and Blade & Soul, producing a $6m loss in the second quarter of this year.
* Although preorders, pre-purchases and pre-buys of Guild Wars 2 reached 1 million in sales, after beta weekend there was a sharp decline in demand and player anticipation, complicated by hacked accounts, bugs and server instability even during the headstart (which is the norm for any new gaming product on launch phase). Investors were concerned about the situation and had worries that players will defect from GW2 and go (back) to WoW on Sept 25 when Mists of Pandaria launches.
* On the last days of the month, GW2 was 6th in runing, behind other game titles (such as a Madden NFL l3, CoD: Black OPS 3, with WoW: MoP closely folowing) in North America, but topped sales charts this week in the UK, but still sold less at retail than Star Wars: The Old Republic did at launch. August 28 launch, GW2 sales wasnt moving until Aug 31 - when City Of Heroes was shut down. GW2 units were sold out on September 1, holiday weekend. A self-imposed digital sales suspension was enacted By ArenaNet, which was not initially in accordance with NCSoft. The self-imposed digital sales suspension was done to preserve player experience. Player experience = balancing fair server loads, for cs support to be able to address player petitions, as well as preventive measures against phising and hacking.
Translation: kill off a (slightly) profitable product line to replace it with one that gives a higher return on investment (or has better long term sustainability. No dead weight = Financial Reports will show that all products show big profit.

Getting rid of baggage:
*Less maintenance overhead + fused concentrated playerbase + no licensing issues = more profit.
*Perfect World owns the rights to CoH’s engine and kept the renewal cost too high for NCSoft. Hitting several birds with one stone, shutting down CoH will be a win-win situation for NCSoft (Guild Wars 2) and Perfect World (Champions Online) as troublesome licensing issues will never be dealt with again, and the CoH player base is projected to migrate over to those games. While the active player base of City of Heroes (120,000 active subscribers - premium and f2p players excluded in computation) isnt supposedly enough to actually affect/have much impact on those game upon migration, its more about getting rid of the hassles associated with re-negotiating licenses every "x" amount of years (which lessens player/investor confidence during renewal dates)
* Laying-off 80+ personel from Paragon Studios, some who will be entitled to increased benefits after several years employment, solves increased expenses for the final quarter of the year.

History repeating itself:
* NCsoft West director of corporate communications Lincoln Davies explains: "the continued support of the franchise no longer fits with our long-term goals for the company."
Translation: you can make money from killing off a (slightly) profitable product line if it's replaced by one with a higher return on investment (or has better long term sustainability).
* 2009: Tabula Rasa shutdown; corporate restructuring, realignment and focus on Aion.
* 2012: City of Heroes shutdown; corporate restructuring, realignment and focus on Guild Wars 2.


TLDR version: Reason --> Hassle-free Profits.


*um, wondering if we're allowd to (cross-)post the links to the other coh forum posts as well as links to some other sites so i can show where all these copy pasted stuff is from. i noticed the other posts dont have refference links (just like links to pics)... just made me wonder if thats the case why i dont see cross-post links*

The game wasn't bringing in $10-12 million in net profits, just $10 -12 million in revenue, big difference.

The last time NCSoft reported unique users in a quarter number was third quarter 2008 at a touch under 125,000 and the game's revenue was $5.84 million. The quarter before Freedom, Q2 2011, when the game was still subscription based, $2.58 million, implying 55-60,000 active accounts. Q2 2012 earnings was $2.49 million so the change over to Freedom didn't seem to help. (The dollar figures are based on NCSoft's revenue numbers converted from Korean Won to US dollars using the average exchange rate for that quarter, since the assumption is the bulk of CoH players are US.)